China LFP Supply Deal Between Wanrun and CATL Secures 1.32 Million Tonnes

Wanrun

China LFP supply deal reached historic proportions as Hubei Wanrun New Energy Technology signed a five-year agreement to deliver 1.32 million tonnes of lithium-iron-phosphate cathode materials to CATL. The massive China LFP supply contract from May 2025 through May 2030 represents one of the largest battery materials procurement agreements in the industry, highlighting CATL's aggressive expansion strategy and LFP technology's growing market dominance.

Strategic Partnership Drives Battery Technology Innovation

China LFP supply partnership extends beyond simple procurement to encompass joint research and development initiatives. Wanrun and CATL agreed to collaborate on high-density LFP product iteration and mass production capabilities while jointly exploring new energy market opportunities. CATL committed to purchasing at least 80% of promised monthly quantities, providing Wanrun with guaranteed revenue streams and production planning certainty.

Meanwhile, Wanrun demonstrated strong operational performance with 2024 LFP production reaching 233,108 tonnes, representing 51% growth from 2023. Sales volumes increased 39% to 228,240 tonnes during the same period, reflecting robust market demand and the company's expanding manufacturing capabilities. This performance trajectory supports the substantial supply commitments made to CATL.

CATL's Market Leadership Drives Demand Growth

However, CATL's explosive growth trajectory necessitates secured raw material supplies for sustained market expansion. The battery giant sold 120 GWh of batteries in Q1 2025, marking 30% year-over-year growth and reinforcing its position as China's largest battery producer. CATL raised $4.6 billion through Hong Kong Stock Exchange share sales on May 20th, specifically targeting global battery market expansion financing.

Therefore, the Wanrun supply agreement aligns perfectly with CATL's international growth strategy and capital deployment plans. The five-year commitment provides production stability while supporting CATL's aggressive capacity expansion across multiple global markets. This strategic partnership model demonstrates how Chinese battery companies integrate vertically to secure critical material supplies.

LFP Technology Gains Global Market Share

Furthermore, lithium-iron-phosphate batteries captured nearly half of the global electric vehicle battery market in 2024 according to the International Energy Agency. LFP technology offers significant advantages including lower manufacturing costs and enhanced safety performance compared to ternary battery alternatives. These benefits drive increasing adoption across automotive manufacturers seeking cost-effective energy storage solutions.

As a result, the Wanrun-CATL partnership positions both companies advantageously within the rapidly expanding LFP segment. China's dominance in LFP production creates competitive advantages for domestic battery manufacturers while supporting the country's electric vehicle industry leadership. The supply agreement reinforces China's integrated approach to battery supply chain control from raw materials through finished products.

The Metalnomist Commentary

The Wanrun-CATL supply agreement exemplifies China's systematic approach to battery supply chain integration, securing critical materials access while driving technology innovation through strategic partnerships. This 1.32 million tonne commitment reflects both companies' confidence in LFP technology's long-term market prospects and China's continued dominance in global battery manufacturing despite increasing international competition.